25 January 2024 – Encouraging thoughtful marketing and loyalty may help small businesses win back customers despite inflation!
Marigold, a leading authority in relationship marketing, recently published its report on consumer trends 2024. The index is a valuable resource for small businesses, especially when competition isn’t just with larger companies but also the economy.
Consumers are holding tight to disposable income
Presently, the economy is volatile, and consumers are cutting out unnecessary purchases. Businesses, even more so SMEs, may find themselves in a difficult position.
According to the report, most survey participants were pessimistic towards the rising cost of living.
They’re also being more mindful when buying from their favourite brands. Compared to last year, 48% of those surveyed did more research on the product to ensure it met their needs.
Regardless of the price tag, 52% also had fewer instant purchases this year. Another 42% started waiting more for sales and offers before finalising a sale. Meanwhile, 43% found themselves relying more on loyalty programs and rewards.
So, how can small businesses drive sales when consumers are more picky with brands that deserve their money?
Quality, not lowest price, is critical in making purchase
A guaranteed sales method is by letting the product speak for you. Consumer trends 2024 revealed this as one of the leading factors influencing a purchase decision.
The quality of a brand’s product or service occupies the top spot, with the global average at 69%. It is followed by convenience, with 59% preferring those with flexible purchase or delivery options.
Small businesses can also improve customer service and support to attract more buyers, with 45% of participants preferring this approach.
Surprisingly, brand reputation at 43% and ethical values at 27% ranked in the lower end of the scale. At the same time, 18% of participants placed the least importance on a consistent digital experience.
Email ranks first as a marketing channel
The numbers from the consumer trends 2024 show that email is still the top marketing channel small businesses can trust.
In 2023, 50% of consumers purchased more through email compared to other channels, such as social media ads (48%), post or mail (43%), SMS/MMS messages (24%), and banner ads (21%).
There’s no question that its influence as a standard method of communication makes email a reliable tool for marketing.
It’s worth noting that optimising campaigns for mobile shouldn’t be overlooked. Out of the 50% that bought something from an email, three-quarters were viewing through a mobile format.
SMEs must also carefully use customer data gathered through various marketing tools. Consumers won’t hesitate to distance themselves from intrusive and irrelevant campaigns.
For example, there is more apprehension with location-targeted marketing. 64% find ads from unrecognised brands using their location offputting. Another 56% react unfavourably to emails highlighting a recently visited location.
Furthermore, social media pessimism is rising as consumers become more wary of implications for security and regulation. 63% are sceptical of ads seen on social media, while just over half are engaging less due to their mental health.
Prioritising personalisation can also improve customer engagement.
51% were frustrated with irrelevant content and offers, while 41% were critical of messages that didn’t reflect their wants and needs. As simple as treating your customers like individuals can encourage a long-lasting business relationship.
Loyalty programs are vital for returning customers
65% of those surveyed will still go out of their way to shop from a brand, even if it means a longer trip.
That is the power of brand loyalty that small businesses can harness. A dedicated loyalty program can turn the tide for SMEs, especially when four in ten consumers are more likely to engage in one.
A point reward system (55%) and exclusive product or service discounts (54%) were the top offerings consumers wanted in exchange for repeat purchases.
Despite ranking second to last, having a sense of community among fellow consumers shouldn’t be disregarded. At 23%, businesses catering to Gen Z should take extra notice.
On the other hand, customer loyalty can be regained through more discounts and codes at 56%, followed by improved quality of products and services at 44%. A better range of products and superior customer service were tied at 36%.
Industry statistics from Marigold’s 2024 Global Consumer Trends Index imply that small businesses may overcome this period of economic uncertainty. SMEs can use intentional marketing strategies such as email campaigns and catering to consumer preferences.
The Marigold Consumer Trends 2024 Index makes for interesting reading. One surprising result is that people want better quality products and services. This shows a tendency away from the consumerism where low prices are everything.
This should be good news for small businesses who are investing a lot of time and money to get it right. And consumers are rewarding this by being prepared to pay more.
The social media scepticism is another interesting result. For the past few years small businesses have been told to use social media to advertise their products. But consumers are getting more aware of the pitfalls of social media, including for their mental health.
That’s not a bad thing. But where does this leave small businesses? Email campaigns remain the top marketing channel. Building an email marketing list is vital for small businesses if they want to thrive in 2024.
While the economic outlook isn’t great, consumers are still willing to spend their money, but they are more picky about where they spend it. So small businesses have to make sure they stand out from the crowd and give consumers what they want.